diff --git a/deployment/puppet/nailgun/examples/site.pp b/deployment/puppet/nailgun/examples/site.pp
index ad0dfbefd5..8d5b1b0706 100644
--- a/deployment/puppet/nailgun/examples/site.pp
+++ b/deployment/puppet/nailgun/examples/site.pp
@@ -1,4 +1,20 @@
 $fuel_settings = parseyaml($astute_settings_yaml)
+$fuel_version = parseyaml($fuel_version_yaml)
+
+if is_hash($::fuel_version) and $::fuel_version['VERSION'] and $::fuel_version['VERSION']['production'] {
+    $production = $::fuel_version['VERSION']['production']
+}
+else {
+    $production = 'prod'
+}
+
+if $production == 'prod'{
+  $env_path = "/usr"
+  $staticdir = "/usr/share/nailgun/static"
+} else {
+  $env_path = "/opt/nailgun"
+  $staticdir = "/opt/nailgun/share/nailgun/static"
+}
 
 # this replaces removed postgresql version fact
 $postgres_default_version = '8.4'
@@ -51,10 +67,11 @@ node default {
   class { "nailgun":
     package => "Nailgun",
     version => "0.1.0",
+    production => $production,
     astute_version => "0.0.2",
     nailgun_group => "nailgun",
     nailgun_user => "nailgun",
-    venv => "/opt/nailgun",
+    venv => $env_path,
 
     pip_index => "--no-index",
     pip_find_links => "-f file://${pip_repo}",
@@ -69,8 +86,8 @@ node default {
     database_user => "nailgun",
     database_passwd => "nailgun",
 
-    staticdir => "/opt/nailgun/share/nailgun/static",
-    templatedir => "/opt/nailgun/share/nailgun/static",
+    staticdir => $staticdir,
+    templatedir => $staticdir,
 
     cobbler_url => "http://localhost/cobbler_api",
     cobbler_user => $cobbler_user,
diff --git a/deployment/puppet/nailgun/files/supervisor-sysconfig b/deployment/puppet/nailgun/files/supervisor-sysconfig
index 2845ada745..c183ad372e 100644
--- a/deployment/puppet/nailgun/files/supervisor-sysconfig
+++ b/deployment/puppet/nailgun/files/supervisor-sysconfig
@@ -1,9 +1,9 @@
 # this is sourced by the supervisord init script
 # written by jkoppe
 
-set -a 
+set -a
 
-# should probably put both of these options as runtime arguments 
+# should probably put both of these options as runtime arguments
 OPTIONS="-c /etc/supervisord.conf"
 PIDFILE=/var/run/supervisord.pid
 
diff --git a/deployment/puppet/nailgun/lib/facter/fuel_version.rb b/deployment/puppet/nailgun/lib/facter/fuel_version.rb
new file mode 100644
index 0000000000..d31f67688c
--- /dev/null
+++ b/deployment/puppet/nailgun/lib/facter/fuel_version.rb
@@ -0,0 +1,11 @@
+require 'facter'
+
+fuel_version_path = '/etc/nailgun/version.yaml'
+
+Facter.add('fuel_version_yaml') do
+  if File.exist?(fuel_version_path)
+    setcode { File.read(fuel_version_path) }
+  else
+    setcode { "none" }
+  end
+end
diff --git a/deployment/puppet/nailgun/manifests/init.pp b/deployment/puppet/nailgun/manifests/init.pp
index 71ce1523f1..f322a29423 100644
--- a/deployment/puppet/nailgun/manifests/init.pp
+++ b/deployment/puppet/nailgun/manifests/init.pp
@@ -1,9 +1,10 @@
 class nailgun(
   $package,
   $version,
+  $production,
+  $venv,
   $nailgun_group = "nailgun",
   $nailgun_user = "nailgun",
-  $venv = "/opt/nailgun",
 
   $repo_root = "/var/www/nailgun",
   $pip_index = "",
@@ -17,8 +18,8 @@ class nailgun(
   $database_user = "nailgun",
   $database_passwd = "nailgun",
 
-  $staticdir = "/opt/nailgun/share/nailgun/static",
-  $templatedir = "/opt/nailgun/share/nailgun/static",
+  $staticdir,
+  $templatedir,
   $logdumpdir = "/var/www/nailgun/dump",
 
   $cobbler_url = "http://localhost/cobbler_api",
@@ -110,6 +111,7 @@ class nailgun(
     package => $package,
     version => $version,
     pip_opts => "${pip_index} ${pip_find_links}",
+    production => $production,
     nailgun_user => $nailgun_user,
     nailgun_group => $nailgun_group,
 
@@ -142,8 +144,17 @@ class nailgun(
     gem_source => $gem_source,
   }
 
+  if $production == 'prod' {
+    $nailgun_env = $venv
+    $ostf_env = $venv
+  } else {
+    $nailgun_env = '/opt/nailgun'
+    $ostf_env = '/opt/fuel_plugins/ostf'
+  }
+
   class { "nailgun::supervisor":
-    venv => $venv,
+    nailgun_env => $nailgun_env,
+    ostf_env => $ostf_env,
   }
 
   class { "nailgun::nginx-repo":
@@ -202,6 +213,7 @@ class nailgun(
   class { "nailgun::logrotate": }
 
   class { "nailgun::ostf":
+    production => $production,
     pip_opts => "${pip_index} ${pip_find_links}",
   }
 
diff --git a/deployment/puppet/nailgun/manifests/ostf.pp b/deployment/puppet/nailgun/manifests/ostf.pp
index d87d22fcf7..ba997abf70 100644
--- a/deployment/puppet/nailgun/manifests/ostf.pp
+++ b/deployment/puppet/nailgun/manifests/ostf.pp
@@ -1,5 +1,6 @@
 class nailgun::ostf(
   $pip_opts,
+  $production,
   $venv     = '/opt/fuel_plugins/ostf',
   $dbuser   = 'ostf',
   $dbpass   = 'ostf',
@@ -19,53 +20,69 @@ class nailgun::ostf(
     grant    => 'all',
     require => Class['::postgresql::server'],
   }
-  nailgun::venv::venv{'ostf-venv':
-    venv     => $venv,
-    ensure   => 'present',
-    opts     => "--system-site-packages",
-    pip_opts => $pip_opts,
-  }
-  Nailgun::Venv::Pip {
-    venv    => $venv,
-    opts => "$pip_opts",
-    require => [
-      Nailgun::Venv::Venv['ostf-venv'],
-      Package['libevent-devel'],
-      Package['openssl-devel'],
-      Package['postgresql-devel'],
-    ],
-  }
-  file { "$venv/pip-requires.txt":
-    source => 'puppet:///modules/nailgun/venv-ostf.txt',
-    owner => 'root',
-    group => 'root',
-    mode => 0755,
-  }->
-  nailgun::venv::pip { "${venv}_setuptools-git":
-    package => 'setuptools-git==1.0',
-  }->
-  nailgun::venv::pip { "${venv}_d2to1":
-    package => 'd2to1==0.2.10',
-  }->
-  nailgun::venv::pip { "${venv}_pbr":
-    package => 'pbr==0.5.21',
-  }->
-  nailgun::venv::pip { "${venv}_ostf-req":
-    package => "-r $venv/pip-requires.txt",
-  }->
-  nailgun::venv::pip { "${venv}_ostf":
-    package => 'fuel-ostf',
-  }
-  exec {'ostf-init':
-    command => "$venv/bin/ostf-server \
-      --host=${host} --port=${port} --log_file=${logfile} \
-      --dbpath '${dbengine}://${dbuser}:${dbpass}@${dbhost}:${dbport}/${dbname}' \
-      --after-initialization-environment-hook || /bin/true",
-    require => [
-      Postgresql::Db[$dbname],
-      Nailgun::Venv::Pip["${venv}_ostf-req"],
-      Nailgun::Venv::Pip["${venv}_ostf"],
-    ],
-    before => Class['nailgun::supervisor'],
+  if $production == 'prod' {
+    package{'fuel-ostf':}
+
+    exec {'ostf-init':
+      command => "/usr/bin/ostf-server \
+        --host=${host} --port=${port} --log_file=${logfile} \
+        --dbpath '${dbengine}://${dbuser}:${dbpass}@${dbhost}:${dbport}/${dbname}' \
+        --after-initialization-environment-hook || /bin/true",
+      require => [
+        Package["fuel-ostf"],
+        Postgresql::Db[$dbname],
+      ],
+      before => Class['nailgun::supervisor'],
+    }
+  } else {
+    nailgun::venv::venv{'ostf-venv':
+      venv     => $venv,
+      ensure   => 'present',
+      opts     => "--system-site-packages",
+      pip_opts => $pip_opts,
+    }
+    Nailgun::Venv::Pip {
+      venv    => $venv,
+      opts => "$pip_opts",
+      require => [
+        Nailgun::Venv::Venv['ostf-venv'],
+        Package['libevent-devel'],
+        Package['openssl-devel'],
+        Package['postgresql-devel'],
+      ],
+    }
+    file { "$venv/pip-requires.txt":
+      source => 'puppet:///modules/nailgun/venv-ostf.txt',
+      owner => 'root',
+      group => 'root',
+      mode => 0755,
+    }->
+    nailgun::venv::pip { "${venv}_setuptools-git":
+      package => 'setuptools-git==1.0',
+    }->
+    nailgun::venv::pip { "${venv}_d2to1":
+      package => 'd2to1==0.2.10',
+    }->
+    nailgun::venv::pip { "${venv}_pbr":
+      package => 'pbr==0.5.21',
+    }->
+    nailgun::venv::pip { "${venv}_ostf-req":
+      package => "-r $venv/pip-requires.txt",
+    }->
+    nailgun::venv::pip { "${venv}_ostf":
+      package => 'fuel-ostf',
+    }
+    exec {'ostf-init':
+      command => "$venv/bin/ostf-server \
+        --host=${host} --port=${port} --log_file=${logfile} \
+        --dbpath '${dbengine}://${dbuser}:${dbpass}@${dbhost}:${dbport}/${dbname}' \
+        --after-initialization-environment-hook || /bin/true",
+      require => [
+        Postgresql::Db[$dbname],
+        Nailgun::Venv::Pip["${venv}_ostf-req"],
+        Nailgun::Venv::Pip["${venv}_ostf"],
+      ],
+      before => Class['nailgun::supervisor'],
+    }
   }
 }
\ No newline at end of file
diff --git a/deployment/puppet/nailgun/manifests/supervisor.pp b/deployment/puppet/nailgun/manifests/supervisor.pp
index 74e244a049..4883b46306 100644
--- a/deployment/puppet/nailgun/manifests/supervisor.pp
+++ b/deployment/puppet/nailgun/manifests/supervisor.pp
@@ -1,5 +1,6 @@
 class nailgun::supervisor(
-  $venv,
+  $nailgun_env,
+  $ostf_env,
   ) {
 
   file { "/etc/sysconfig/supervisord":
diff --git a/deployment/puppet/nailgun/manifests/venv.pp b/deployment/puppet/nailgun/manifests/venv.pp
index 171f3f6c12..649036672a 100644
--- a/deployment/puppet/nailgun/manifests/venv.pp
+++ b/deployment/puppet/nailgun/manifests/venv.pp
@@ -5,6 +5,7 @@ class nailgun::venv(
   $version,
   $pip_opts = "",
 
+  $production,
   $nailgun_user,
   $nailgun_group,
 
@@ -34,47 +35,50 @@ class nailgun::venv(
 
   ) {
 
-  nailgun::venv::venv { $venv:
-    ensure => "present",
-    venv => $venv,
-    opts => $venv_opts,
-    require => Package["python-virtualenv"],
-    pip_opts => $pip_opts,
-  }
+  if $production == 'prod' {
+    package{'nailgun':}
+  } else {
+    nailgun::venv::venv { $venv:
+      ensure => "present",
+      venv => $venv,
+      opts => $venv_opts,
+      require => Package["python-virtualenv"],
+      pip_opts => $pip_opts,
+    }
 
-  Nailgun::Venv::Pip {
-    require => [
-      Nailgun::Venv::Venv[$venv],
-      Package["python-devel"],
-      Package["gcc"],
-      Package["make"],
-    ],
-    opts => $pip_opts,
-    venv => $venv,
-  }
+    Nailgun::Venv::Pip {
+      require => [
+        Nailgun::Venv::Venv[$venv],
+        Package["python-devel"],
+        Package["gcc"],
+        Package["make"],
+      ],
+      opts => $pip_opts,
+      venv => $venv,
+    }
 
-  nailgun::venv::pip { "${venv}_${package}":
-    package => "$package==$version",
-  }
+    nailgun::venv::pip { "${venv}_${package}":
+      package => "$package==$version",
+    }
 
-  nailgun::venv::pip { "${venv}_pbr":
-    package => "pbr==0.5.21",
-    require => [
-      Nailgun::Venv::Venv[$venv],
-    ],
-  }
+    nailgun::venv::pip { "${venv}_pbr":
+      package => "pbr==0.5.21",
+      require => [
+        Nailgun::Venv::Venv[$venv],
+      ],
+    }
 
-  nailgun::venv::pip { "${venv}_psycopg2":
-    package => "psycopg2==2.4.6",
-    require => [
-      Package["postgresql-devel"],
-      Nailgun::Venv::Venv[$venv],
-      Package["python-devel"],
-      Package["gcc"],
-      Package["make"],
-    ],
+    nailgun::venv::pip { "${venv}_psycopg2":
+      package => "psycopg2==2.4.6",
+      require => [
+        Package["postgresql-devel"],
+        Nailgun::Venv::Venv[$venv],
+        Package["python-devel"],
+        Package["gcc"],
+        Package["make"],
+      ],
+    }
   }
-
   file { "/etc/nailgun":
     ensure => directory,
     owner => 'root',
@@ -96,17 +100,26 @@ class nailgun::venv(
   file { "/usr/local/bin/fuel":
     ensure  => link,
     target  => "/opt/nailgun/bin/fuel",
-    require => Nailgun::Venv::Pip["${venv}_${package}"],
   }
 
-  exec {"nailgun_syncdb":
-    command => "${venv}/bin/nailgun_syncdb",
-    require => [
-                File["/etc/nailgun/settings.yaml"],
-                Nailgun::Venv::Pip["${venv}_${package}"],
-                Nailgun::Venv::Pip["${venv}_psycopg2"],
-                Class["nailgun::database"],
-                ],
+  if $production == 'prod' {
+    exec {"nailgun_syncdb":
+      command => "${venv}/bin/nailgun_syncdb",
+      require => [
+                  File["/etc/nailgun/settings.yaml"],
+                  Class["nailgun::database"],
+                  ],
+    }
+  } else {
+    exec {"nailgun_syncdb":
+      command => "${venv}/bin/nailgun_syncdb",
+      require => [
+                  File["/etc/nailgun/settings.yaml"],
+                  Nailgun::Venv::Pip["${venv}_${package}"],
+                  Nailgun::Venv::Pip["${venv}_psycopg2"],
+                  Class["nailgun::database"],
+                  ],
+    }
   }
 
   exec {"nailgun_upload_fixtures":
diff --git a/deployment/puppet/nailgun/templates/supervisord.conf.erb b/deployment/puppet/nailgun/templates/supervisord.conf.erb
index ba7b28cf76..5c40f0fca1 100644
--- a/deployment/puppet/nailgun/templates/supervisord.conf.erb
+++ b/deployment/puppet/nailgun/templates/supervisord.conf.erb
@@ -15,7 +15,7 @@ childlogdir=/var/log/supervisor
 serverurl=unix:///var/run/supervisor.sock
 
 [program:nailgun]
-command=<%= @venv %>/bin/nailgund
+command=<%= @nailgun_env %>/bin/nailgund
 process_name=%(program_name)s
 numprocs=1
 numprocs_start=0
@@ -33,7 +33,7 @@ stdout_events_enabled=false
 serverurl=AUTO
 
 [program:assassind]
-command=<%= @venv %>/bin/assassind
+command=<%= @nailgun_env %>/bin/assassind
 process_name=%(program_name)s
 numprocs=1
 numprocs_start=0
@@ -51,7 +51,7 @@ stdout_events_enabled=false
 serverurl=AUTO
 
 [program:receiverd]
-command=<%= @venv %>/bin/receiverd
+command=<%= @nailgun_env %>/bin/receiverd
 process_name=%(program_name)s
 numprocs=1
 numprocs_start=0
@@ -94,7 +94,7 @@ stderr_events_enabled=false
 serverurl=AUTO
 
 [program:ostf]
-command=/opt/fuel_plugins/ostf/bin/ostf-server --host=127.0.0.1 --port=8777 --log_file=/var/log/ostf.log --dbpath postgresql+psycopg2://ostf:ostf@127.0.0.1:5432/ostf
+command=<%= @ostf_env %>/bin/ostf-server --host=127.0.0.1 --port=8777 --log_file=/var/log/ostf.log --dbpath postgresql+psycopg2://ostf:ostf@127.0.0.1:5432/ostf
 process_name=%(program_name)s
 numprocs=1
 numprocs_start=0